Question 2: Is Drawback at a higher All Industry Rate (AIR) admissible if an exporter has not availed Input Tax Credit of GST or refund of IGST paid on exported goods ? Introduction: IGST refund inspite of duty drawback on higher rate. The Taxpayer is a Cotton Ginning Mill, engaged the business of procuring raw cotton from farmers, ginning the same, pressing the same, carrying out necessary process, converting it into bales and then exporting these cotton bales out of India. Where to invest money in India (to make it work for you)? GST authorities directed to immediately sanction the refund of the IGST along with a 7% simple interest from the date of the Shipping Bill till the date of actual refund. we used to availed duty drawback in the High rate i.e till 30/6/2017. In order to submit a comment to this post, please write this code along with your comment: dac2acee488b95396072228aac95a7c1. The input of capital goods not allowed. rates and caps available under columns (4) and (5) of the Schedule of All Industry Rates of Duty Drawback have been continued for a transition period of three months i.e. As per Section 16(3)(b) read with Section 54 of the IGST Act, the Taxpayer has an option to claim refund on the exported goods to the extent of the IGST paid on the exported goods. still expanding the opportunities to restrict the permission for refunds, and that Even then, in respect of one shipping bill, both benefits can be claimed simultaneously after 01.10.2017. A circular can not prevail over the Several goods exporters across the country could not avail of their ITC refund for a period of July 17 to September 17. No IGST refund to exporters if initially claimed benefit of higher drawback or where higher rate and lower rate were identical- CBIC. For further information on GST or for enquiries regarding drawback of excise duty, see the Australian Taxation Office website. Duty drawback is one of the export incentives provided by the Government of India under the Foreign Trade Policy. was to apply the provisions of the Circular to ensure that no taxpayer or Section 54 of CGST Act 2017 referred to above should be read along with Rule 96 of the rules. Refund. Despite the repeated follow-ups, the GST authorities had not released the IGST refund to the Taxpayer. , I argued before *Madurai Bench of Madras Highcourt *, an issue relating to IGST refund being refused by the department because of claim of Higher duty drawback. Happy to Share for the benefit of all, that today in the matter of Petitioner is M/s Precot Meridien Limited. Read Also: GST on Purchase and Sale of second hand used goods – Margin Scheme The Taxpayer is registered under the GST law. Circular No. 37/2018-Customs, dated 9-10-2018. exporter should benefit more than it should be in the same transition. Rate of Duty Drawback available was 0.15% if they wanted refund of IGST or Inputs GST. Unreasonable delays in grant of refund of Integrated Goods and Services Tax (‘IGST’) has impacted several exporters in the recent past. Blog » Circular can not prevail over the statute, HC allows IGST refund where higher rate of drawback claimed. We are exporting against Letter of Undertaking without paying GST. statute. The technicalities of the new rules clearly showcase that, claiming for the benefits of the IGST law was a wise idea. The single bench under Justice M. Govindaraj made their decision in the case of M/S Precot Meridian Limited vs. F. No. They stated that the petitioner has claimed a higher duty drawback. There are no minimum drawback amounts for private exporters. 5. Exporters avail the option to take drawback at higher rate in place of IGST refund on their own volition as part of the prescribed documentation/ forms. This rate is on higher side and cenvat facility is not available with this rate. Alongside, there is not even an option available that will help taxpayers to consider the IGST refund claim as non-acceptable. Section 54 of CGST Act 2017 read with Rules 96(4) of CGST Rules 2017, 2. If exporter has wrongly mentioned A, the GST refund for the month of July-Sept is denied while the exporter has not claimed higher drawback since both rates of drawback are the same. This facility will enable a taxpayer (whether supplier or recipient) to send a message to another registered person (whether supplier or recipient) through the GST portal itself. Some of the common areas where one finds issues leading to either no claim or erroneous claim or tips to enable incentives to be cashed have been examined in this article as under: Duty Drawback & GST Refund are mutually exclusive. While coming up with the decision, the court has cited two similar verdicts. Duty Drawback provisions are made to grant rebate of duty or tax chargeable on any imported / excisable materials and input services used in the manufacture of export goods. shall only be brought by an alteration of the current terms of GST law. And later, he repaid the amount along with interest and asked for a refund of the amount he paid as IGST. 59/2017 - Cus (NT) dated 29.06.2017,certificate from jurisdictional GST officer was required to claim higher drawback for transition period of 3 Months (i.e upto 30.09.2017) Govt. Maintained by V2Technosys.com, Taxguru Consultancy & Online Publication LLP, 509, Swapna Siddhi, Akurli Road, Near Railway Station, Kandivali (East), Higher Rate of Duty Drawback & IGST Refund under GST Regime, M/s. The order to be considered as ‘Rule absolute’ i.e., order to be enforced at once and immediately, without any delay. We are availing duty drawback in the lower rate (from 1/7/2017 onwards), earlier. The information here will help you to claim a: refund of excise duty you have paid on goods; drawback of excise duty paid on goods that have since been exported. Section 54 of the Central Goods and Services Tax Act, 2017, specifies that subject to the provisions of Sub-Section (10), a registered person may claim refund at the end of any tax period. the Madras High Court has given their verdict in favour of the exporter. RFD-01. All Rights Reserved. The shipping bill that the exporter of goods may file is deemed to be an application for refund of Integrated tax paid on the goods exported out of India. “Adv. Some of these were purchased on payment of excise during pre-GST era and some after July 1, 2017 on payment of GST. While the intention of the CBIC and GST authorities by applying the provisions of the Circular was to ensure that no exporter is doubly benefitted for the same transaction, the same does not have authority under the existing provisions of GST law. Join our newsletter to stay updated on Taxation and Corporate Law. However, this facility of claiming drawback is available to the exporters only up to 30 th September 2017 because as rates and caps available under columns (4) and (5) of the Schedule of All Industry Rates of Duty Drawback have been continued for a transition period of three months i.e. 01.01.2021, Auto population of E-Invoice details in GSTR-1/2A/2B/4A/6A, Online communication on GST portal | Facility between Supplier and Recipient, Uploading Show Cause Notice and Order on GST Portal is Mandatory | SCN and order sent via email only is invalid, Analysis of New RBI Monetary Policy, 2020 & few recent changes by RBI. Where exporters avail such option and provide a declaration while claiming the higher rate of drawback, it would not be justified allowing exporters to avail IGST refund after initially claiming the benefit of higher drawback. The Shipping Line had generated Export General Manifest and Bill of Lading. The duties and taxes neutralized under the scheme are, (i) Customs and GST in respect of inputs and. In one of such cases, To ease this communication, the GST system has added a new Facility of “Communication Between Taxpayers” on the GST portal. The Madras Court directed the Respondent to refund the amount paid as IGST by M/S Precot Meridian Ltd. for the goods they exported from India since it falls under “zero-rated supplies.” The court has directed that the petitioner has to get the refund within six weeks from the date of receipt. RFD-01. Sub: Clarification regarding exports under claim for drawback in the GST scenario. the HC, it has been clarified that the IGST refunds legal position is needed to The Taxpayer had issued Commercial Invoice(s), Export Invoice(s) and Shipping Bill(s). Refund of ITC shall not be allowed if supplier of goods/services avails of drawback in respect of CGST or claims refund of IGST paid on such supplies. We exported certain goods without GST payment under letter of undertaking. The respondents are given liberty to adjust the amount already availed by the petitioner on account of higher rate of duty drawback and pay the balance of IGST payable to petitioner within six weeks from the date of receipt of a copy of this judgment. Once the exporter draws higher duty drawback, the system automatically scrolls out IGST refund. Introduction: IGST refund inspite of duty drawback on higher rate. The respondents have also said that as the petitioner draws a higher duty drawback, the system opts out of IGST refund automatically. Refund of excess duty drawback is a unilateral action: Refund of the differential duty drawback by the Taxpayer is a unilateral act by the Taxpayer not recognized under … , I argued before *Madurai Bench of Madras Highcourt *, an issue relating to IGST refund being refused by the department because of claim of Higher duty drawback. Required fields are marked *, Notice: It seems you have Javascript disabled in your Browser. The rationale for not allowing the refund of IGST for those exporters, who claim higher duty drawback is that the higher duty drawback reflects the elements of Customs, Central Excise and Service Tax taken together and since higher duty drawback is already being availed than granting the IGST refund would amount to double benefit as the Central Excise and Service Tax has been subsumed in the GST. See the definition of' 'refund' under Section 54 and 55 of CGST Act. 1. Who is required to  Generate E-invoice? ITC and refund allowed. By declaring drawback serial number suffixed with A or C and by making above stated declarations, the exporters consciously relinquished their IGST/ITC claims. In the case of exports, the end consumer of the goods or services would be not in India and GST would not be applicable. 2. As a result, the government contemplates are Under such a scheme, reimbursement of such taxes/duties/levie, paid at the central/ state/ local level, shall be granted which is not refunded in any other mechanism. Counterparty can send his reply using the same feature. However, the respondents were relying on a Government circular. No double benefit. Neither the author nor firm and its affiliates accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon. 37/2018-Customs, dated 9-10-2018. I have heard the submissions. John Varrghese by way of reply submits that the respondents if insist upon refund of higher rate of duty drawback by the petitioner with interest, the respondents are also required to pay interest to petitioner from the date on which the petitioner requested for refund of IGST. Rule 96 is relevant for two purposes. case of M/S. Therefore, the petitioner is not entitled to refund. CONDITIONS. The Commissioner of Customs and Anr related GST refund where higher drawback claimed. Restriction on value to 1.5 of the value of domestic goods. Judgment 1st Gujarat High Court rules that claim of higher rate of duty drawback is not a valid reason for rejection of IGST refund on exports. In the Accordingly, if the goods which are exported as subject to export duty or any drawback is to be claimed on such exports, refund of utilized ITC may not be available. A brief idea about drawback on deemed exports under GST regime, TED refund against deemed exports under GST etc. You got drawback and ROSL on account of tax paid on inputs contained in goods exported without payment of GST. As the petitioner claimed, he exported the goods only after paying the tax, but he was not offered the refund of the input tax credit as the Zero-rated supply act Section 16(3) of the IGST Act suggests. As the circular suggests, if an exporter consciously asks for a refund of the higher rate of duty drawback, he is not supposed to be entitled to IGST or ITC claims. Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies. Question 19: I supply goods to SEZ units and developers. Answer: No. Section 54(3) allows refund of un-utilised Input Tax Credit (ITC) under two circumstances i.e. Sub: Clarification regarding exports under claim for drawback in the GST scenario. As per the judgment of Even then, in respect of one shipping bill, both benefits can be claimed simultaneously after 01.10.2017. Several goods exporters across the country could not avail of their ITC refund for a period of July 17 to September 17.